The Fed is taking a pause, but preparing a strike: 9 out of 18 FOMC members voted for a rate hike in 2026
Kevin Warsh's first meeting as head of the Federal Reserve System was an event that markets will remember for a long time. Despite the key interest rate being left unchanged in the range of 3.50%–3.75% (already the fourth consecutive meeting), the regulator's rhetoric changed sharply. The signal we received is not just a "hawk," but an entire squadron.
Neutrality as a cover for a tough stance
The wording about "additional rate adjustments" disappeared from the final FOMC statement. Instead, there is an emphatically neutral, fully data-dependent approach. However, behind this diplomacy lies an alarming fact: nine out of 18 committee members forecast at least one rate hike in 2026. Not long ago, the majority leaned towards a cut or a prolonged pause.
Inflation in the US remains near 4.2% year-over-year — more than double the target level of 2%. This is a key trigger for a policy reversal. Citadel Securities is already warning that markets are underestimating the risk of a rate hike as early as September, citing a strong labor market, high demand, supply chain disruptions, and an AI investment boom.
Markets in the red: sell-off in stocks and bonds
Wall Street's reaction was swift. The S&P 500 fell by 0.6%, the Nasdaq by 0.7%, and the Dow Jones dropped 160 points. The yield on two-year Treasury notes jumped 11 basis points to 4.153%, and the ten-year yield rose 4 basis points to 4.469%. Investors are shifting into the dollar, which strengthened amid uncertainty.
This scenario is a direct consequence of Warsh making it clear at his first press conference that he prefers a "more restrained" Fed with minimal advance hints for the market. The expectations of a dovish approach associated with his appointment have been shattered.
Analyst's view
As the lead analyst at Cryptalist, I see this as a clear signal: the Fed is not just fighting inflation but is moving into a preemptive strike mode. For the cryptocurrency market, this means increased pressure on liquidity. Rising Treasury yields and a strengthening dollar are classic "bearish" factors for Bitcoin and altcoins. If a rate hike indeed follows in September, we could see a 15–20% correction across the digital asset market. Now is the time for conservative risk management, not for aggressive leveraged buying.